Manulife first-quarter profit falls; dividend raised

TORONTO (Reuters) - Manulife Financial Corp (MFC.TO) reported a lower first-quarter profit on Thursday due to the impact of its energy holdings on its investment business, but the insurer raised its quarterly dividend.

The Toronto-based company, which has major operations in Canada, the United States and Asia, also recorded a rise in assets under management to C$821 billion ($680 billion). Manulife shares climbed 1.2 percent to C$22.79, reaching their highest level in about five months.

Manulife, Canada’s largest insurer, has been expanding its reach through acquisitions and partnerships. Earlier this year, it completed a near-$4 billion deal for the Canadian operations of the British insurer Standard Life SL.L and acquired New York Life Insurance Co’s retirement services business.

“We will continue to look at opportunities that may be available if they match the interests of our shareholders to provide core earnings growth over the medium term,” Chief Financial Officer Steve Roder said in an interview.

The company is also active in Asia, where sales in Japan and China helped drive segment growth in the first quarter.

Last month, Manulife signed a $1.2 billion deal with Singapore’s DBS Group Holdings Ltd for a 15-year partnership that will allow the insurer to sell products through the lender’s Asian branch network.

The company’s net profit fell to C$723 million, or 36 Canadian cents a share, in the quarter ended March 31, compared with C$818 million, or 42 Canadian cents a share, a year ago.

Core profit rose to 39 Canadian cents a share, from 37 Canadian cents a share a year earlier.

Analysts, on average, had expected earnings of 42 Canadian cents per share, according to Thomson Reuters I/B/E/S.

“If you leave aside the inherently volatile investment experience, then we had a really strong quarter,” Roder said, adding that oil and gas holdings represented less than 1 percent of the company’s total asset portfolio.

Barclays Capital analyst John Aiken said, “When we look at the investment performance in the quarter, it’s not a good news story.”

“Going forward, given where oil prices are today, they are more than likely to recoup some of those losses in the second quarter,” he added.

Also on Thursday, insurer Great-West Lifeco Inc (GWO.TO), which has a presence in Canada, the United States, Europe and Asia, reported a higher rise in first-quarter profit. Great-West shares were down about 1 percent at C$36.66 in afternoon trading.